Colorado can’t shake a troubling employment trend. The latest jobs report reveals the state increasingly relies on government hiring to prop up overall employment numbers — offsetting private-sector job losses.

The Common Sense Institute first flagged the problem in an eye-opening report on job creation last year. In the 12 months ending February 2025, Colorado posted a net gain of just 500 non-agricultural jobs statewide.

During that same period, the state lost a net 14,700 private-sector jobs, while more than 15,000 positions were added to public payrolls at various levels of government.

CSI found this was the second highest rate of public-sector job growth in the nation — all at taxpayer’s expense. Fewer private-sector workers are paying taxes for more government employees.

Although not as pronounced as 2024, when the FAMLI program ramped up hiring, the trend continues. 

The most recent federal household survey showed monthly net gains of only 500 non-agricultural jobs in September, right before the longest federal government shutdown to date.

That alone isn’t good news. But it gets worse: The private sector lost 200 jobs, while government picked up some slack with 700 new jobs. 

Without government hiring, Colorado would have posted net job losses. We’ve previously called government the employer of last resort in our state. That shoe still fits.

Even worse, annual job growth of only 0.6% continues to lag behind the national rate of 0.8%.

Over the 12 months ending Sept. 2025, the state gained 18,100 total jobs — 42.5% of them in government. This isn’t sustainable. The more employees government hires, the stronger the incentive to keep expanding a state government already stretched thin by a budget shortfall so great, the legislature convened a special session to address it.

Meanwhile, Colorado’s unemployment rate slid from 4.2% to 4.1% from August to September. At first glance, that seems encouraging — a decline that’s also three-tenths of a percentage point below the national rate. 

Not so fast. The state’s workforce shrunk by 3,400 working-age adults who are either employed or looking for work. When people exit the workforce, it usually means they’ve given up searching. As a result, labor-force participation fell to its lowest rate since November 2020, during the COVID-19 pandemic — just 67.3%.

Together, growing government employment rolls and declining workforce participation help explain the slight drop in the unemployment rate. With fewer people seeking work, the jobless rate looks better than it really is — even as government hiring props up the raw numbers.

This calls to mind a lesson from the late economist and Nobel laureate Milton Friedman, who often recalled traveling in Asia in the 1960s and watching a new canal under construction.

Rather than using modern tractors and earthmovers, workers were digging with shovels. When a puzzled Friedman asked why, he was told it was “a jobs program.”

“If it’s jobs you want,” Friedman replied, “then you should give these workers spoons, not shovels.”

His deadpan response captured a simple truth about government jobs created for their own sake. They don’t generate new wealth or create new things.

Instead, government-driven job growth crowds out private investment, inflates the state budget, and drains people and businesses of wealth and productivity through higher taxes and fees.

If Colorado keeps digging with spoons, it risks draining the state’s economy over the long run — and just might tarnish Gov. Jared Polis’ legacy once he leaves office.